Pharmacy market update


Has the federal election had any impact on the pharmacy real estate market? Natalie Sirianni looks at the current situation 

As we near the completion of the 2019 financial year, now is a great time to review the year so far and assess how our businesses and the market are tracking. (I can’t believe we are almost half way through 2019!).

It is also a great time to assess your position in pharmacy ownership, because remember, every year you keep your pharmacy you are essentially making the decision to re-invest for the coming year.

So, it is important that you make this decision on an educated basis with knowledge of market conditions.

A buoyant market

Overall, the market sentiment among both buyers and sellers in the pharmacy sales market has remained quite positive in 2019.

Over the last 6 months we have seen fairly steady supply of businesses on the market (although the locations of the pharmacies can often be concentrated in certain cities or states).

We have also seen pharmacies transacting at similar capitalisation rates to last year.

The three key issues

For those of you that regularly read my articles, you may remember that in my February Pharmacy Market Update I highlighted three key factors that may impact on the Pharmacy Business Sales Market in 2019.

The three factors were:

  • Federal Election
  • Banking Royal Commission
  • Seventh Community Pharmacy Agreement (7CPA)

So how are we tracking with these?

  • As we all know, the Federal Election gave us a different outcome to what many expected with the Coalition remaining in power. Our Health Minister has remained the same in Greg Hunt. My personal opinion of this is very positive for pharmacy. Greg Hunt has been a fantastic Health Minister for pharmacy and is a strong believer in the important role that pharmacists and pharmacies play in the community. Therefore, I think this is a good result for pharmacy and likely to impact positively on the pharmacy business sales market too.
  • In terms of the Banking Royal Commission, we have not yet seen much or any impact of this in the pharmacy lending space. All the transactions that we have been involved with in the current year have passed the finance clauses. The finance process is taking longer than it historically has, but this has been a trend for a couple of years now.
  • In relation to the 7CPA, I look forward to seeing how this plays out when the negotiations commence in July 2019. Again, we have not yet seen any impact of the upcoming negotiations on the pharmacy sales market.

If you would like to discuss the above or the pharmacy market in your area, feel free to call Natalie on 1300 ATTAIN (288 246).

“I look forward to assisting you through the important process of buying or selling a pharmacy!”

 

 

 

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